ROME, July 17 (Xinhua) -- Italian financial markets are getting a short-term boost from a relatively unfamiliar source: economic growth data from the world's second largest economy -- China.
Data from China's National Bureau of Statistics on Monday showed that in the second quarter, China's GDP rose 6.2 percent year on year.
The economic performance was in line with or slightly above expectations, with retail sales stronger than most analysts had expected, despite recent trade tensions with the United States.
Stocks and bond markets strengthened across Europe in the wake of the economic news out of Beijing, with Italy being one of the strongest beneficiaries.
Stocks on the Italian Stock Exchange in Milan rallied and stayed strong into Tuesday's session, and more importantly, the yield on Italy's 10-year government bonds fell to 1.6 percent, the lowest level since May 2018.
As recently as December, the yield for the 10-year bonds was an unsustainable 3.66 percent.
Lower yields, which reduce the cost for a government to borrow money, are a reflection of improving investor confidence in a country's ability to pay its debts.
Part of the reason for the pick-up of Italy's financial markets is the country's strong links with the Chinese economy, according to Olivero Fiorini, an economic analyst with ABS Securities in Milan.
"The strong financial data out of China doesn't mean any particular Italian company will do better, but it probably does help assuage fears that the trade war (between the United States and China) will not have the destructive effect (as) some feared," Fiorini told Xinhua. "Stronger retail sales in China is probably good news for Italian exporters."
Italy is one of the European Union's biggest exporters to China, and many of the country's exports to China are retail goods, including high-end fashion and food products.
Additionally, this year Italy has become the first Group of Seven nation to join the Belt and Road Initiative, a step that helps strengthen ties between Rome and Beijing.
"Italy is vulnerable to financial markets, which can react quickly to any unexpected developments," said Alessia A. Amighini, an economist and co-head of the Asia program at the Italian Institute for International Political Studies.
"This time it was good news from China and some domestic factors that helped strengthen markets," he said.